Robust Responsiveness: German SMEs Fret Over Indirect Tariff Woes
Concerns of Small and Medium Sized Enterprises in Germany predominantly revolve around indirect ramifications related to the US duty. - SMEs in Germany express concern over potential indirect effects of US tariffs
Venture into the intricate world of German SMEs and you'll discover their most pressing concerns revolving around U.S. tariffs. Based on a comprehensive study by DZ Bank, these concerns stem chiefly from potential ripples rather than direct waves.
The Ripple Effect on SMEs
The metal, automotive, and machinery sectors, key players in the German economy, brace themselves for the potential cascading effects.
Per DZ Bank analysis, issues such as escalating prices of products in the U.S. or a decline in U.S. market demand for exports loom large for enterprises in these sectors. To shed some light, "These tariffs will not only affect the business of U.S. trading partners, but will have a knock-on effect on our own businesses," divulged a DZ Bank analyst. Two-thirds of companies in these sectors foresee indirect consequences due to these tariffs.
A Calm 29% Amidst the Uncertainty
Approximately 29% of SMEs remain untroubled by the prospective U.S. tariffs. However, potential EU counter-tariffs could pose a more substantial blow to these businesses than the tariffs on American goods themselves, as they could cause higher purchasing costs. Meanwhile, 29% anticipate direct consequences, such as price hikes, while only 19% expect no repercussions.
Foreboding or False Alarm?: The Cost Question
Claus Niegsch of DZ Bank doubts the legitimacy of these concern about surging costs: "While US goods may grow more expensive, other goods initially intended for the American market could wind up in Europe, thus overturning the price balance here."
The Survey Scenario
DZ Bank surveyed a sample of 1,000 German SMEs between March 6 and March 26. At the time, the exact height of EU tariffs was still uncertain, but a 25% demand for automotive tariffs and ongoing 25% steel and aluminum tariffs since March 12 were under discussion. Further, the survey findings indicate a representative snapshot of the German SME landscape.
Germany, Frankfurt am Main, DZ Bank AG, USA, SMEs, EU
- Despite a majority of SMEs in the manufacturing, industry, and finance sectors in EC countries (Germany) expressing concerns about indirect impacts from U.S. tariffs, approximately 29% of these SMEs remain unperturbed.
- In the event of EU counter-tariffs, potential purchasing costs could pose a more significant challenge for the 29% of SMEs in the affected sectors that remain unaffected by the U.S. tariffs directly, compared to the tariffs on American goods themselves.
